Excerpts from the interview:

It is a major change from SCI to Sical?

Yes, it is, after being with a government company and the largest shipping company for 30 years. However, Sical has tremendous potential. With excellent maritime expertise, the efforts need to be channelled for it to become an end-to-end logistics service provider.

What is your role going to be?

I will be a change manager to integrate the wide, diversified group. I will coordinate and integrate the various segments. In the current scenario, interdependency of various operations has increased and I will drive this to deliver better value to clients and, hence, to the business as a whole.

Sical is considered a major player in movement of bulk cargo. Which are the other focus areas for growth?

Currently, 80 per cent of our business is from bulk, that too from coal and iron ore. The ratio should change gradually. Container trade is the business of future, and in offshore and dredging we need to look for opportunities in India. However, without diluting our attention in these key sectors, we plan to grow into more profitable areas, such as merchandise trade.

We need to compress our working capital requirement and reduce the cash-to-cash cycle from the typical 60 plus days prevalent in bulk. We need to broad-base to merchandise trade where we can look at shorter cycles. Merchandise trade will give better margins, shorter cash-to-cash cycles and less working capital requirements.

Could you give examples of merchandise trade?

Pharma, white goods, fast moving consumer goods, etc. This trade offers better margins and lower cash-to-cash cycles, requiring lower working capital. However, risks as per unit value will be higher. For leveraging this opportunity, technology of transport and storage facilities such as warehousing and CFS need to be improved.

What kind of investment is envisaged for the ICDs and CFS?

It will be mainly on land. This will mainly be driven by factors like finalising the right type of land and acquisition of land smoothly. Ennore and Chennai are our current focus.

Will you enter the 4PL (fourth party logistics) space?

The 4PL model, which is prevalent in mature markets like Europe, is that of a consultant. Sical, for now, will be only in 3PL.

Where do you see growth coming from?

ICDs and CFS are major segments of growth with container movement increasing. As a comparison, Singapore handles 24 million containers and Hong Kong too has a similar number, while India as a whole handles only 5.3 million. With the entry of hyper-malls and special economic zones across the country, and led by increased spending by the younger generation, the movement of goods through containers is set to increase.

What sort of trend do you foresee in container trade?

In future, mega container ships will call only at super ports. From super ports, goods will have to move to other ports and that could be coastal container movement rather than road. This will, in turn, increase feeder operations across ports. For example, Vallarpadam, in Kerala, is expecting to give a tough competition to Colombo.

What’s your focus on dredging?

The recently bought dredger will operate in the Chinese waters. We also have a PSV deployed in the North Sea. With plans for deepening the draft across Indian ports, including private ports, we would like to concentrate on India in a big way.

But is competition severe in the dredging area?

Traditionally, dredging has been monopolised by companies in Netherlands and Belgium. China has made some entry into this space. At this point, there is more demand than supply. There are upcoming opportunities in several regions, including the Gulf and Panama.

More Stories on : Interview | Shipping | Supply Chain Management

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page